System and method for event-based trading

ABSTRACT

A system and method for news-based trading are developed. According to one method, a trader can pre-define a trading strategy including a number of trading rules to be applied based on a comparison of one or more estimated event values to the respective actual event values to be released at some later time. The example method further includes, upon receiving one or more actual event values via a user input or directly from outside sources, executing one or more predefined trading rules selected based on the comparison of the received actual event values to the respective estimated indicator values.

CROSS REFERENCE TO RELATED APPLICATIONS

The present application is a continuation of U.S. patent applicationSer. No. 12/764,686, filed Apr. 21, 2010, now U.S. Pat. No. 8,065,222,which is a continuation U.S. patent application Ser. No. 10/734,862filed on Dec. 12, 2003, now U.S. Pat. No. 7,734,528, the contents ofwhich are incorporated by reference herein in their entirety.

FIELD OF INVENTION

The present invention is directed towards electronic trading. Morespecifically, the present invention is directed towards automaticallyexecuting predefined trading rules upon detecting announcements ofeconomic indicators and/or other news related data associated with thetrading strategies.

BACKGROUND

In recent years, a trend towards electronic trading has becomewell-established, causing one major exchange after another to replace orat least supplement the traditional open outcry, where a trade is doneface to face, with automated, electronic systems which automaticallymatch bids and offers. While the motivation behind using electronictrading may vary from market to market, greater efficiency and volumeare some of the considerations.

In particular, subscribing traders are connected to an exchange'selectronic trading platform by way of a communication link and throughan application program interface to facilitate real-time electronicmessaging between themselves and the exchange. The electronic messagingincludes market information that is sent from the electronic market tothe traders. Market information commonly includes information regardingthe inside market and market depth. The inside market is the lowest sellprice in the market and the highest buy price in the market at aparticular point in time. Market depth refers to quantities available atthe inside market and may also refer to quantities available at otherprices away from the inside market. The quantity available at a givenprice level is usually provided by the host exchange in aggregate sums.In other words, a host exchange usually provides the total buy or thetotal sell quantity available in the market at a particular price levelin its data feed. The extent of the market depth available to a traderusually depends on the host exchange. For instance, some host exchangesprovide market depth for all or many price levels, while some provideonly quantities associated with the inside market, and others mayprovide no market depth at all.

Additionally, the host exchange can offer other types of marketinformation such as the last traded price (“LTP”), or the last tradedquantity (“LTQ”).

Just as with an open-outcry exchange, an electronic exchange can listany number of tradeable objects. Often times, traders willsimultaneously trade more than one tradeable object, and they maysimultaneously trade tradeable objects that are listed at more than oneexchange. Ordinarily, each tradeable object has its own separate streamof market information. Therefore, in these instances, the traders willgenerally receive more than one stream of market information such thateach stream of market information attempts to characterize a giventradeable object.

Once the traders receive market information, the market information maybe displayed to them on their trading screens. Upon viewing theinformation, traders may take certain actions including the actions ofsending buy or sell orders to the electronic market, adjusting existingorders, deleting orders, or otherwise managing orders. In general,traders may use trading screens to enter orders into the market, as wellas to obtain and view market information. Traders may also use softwaretools on their client devices to automate these and additional actions.

Generally, when a trader submits an order to a host exchange, the hostchecks the conditions associated with the order, for example, price andquantity, and prioritizes the order with other orders at the same price.When the order conditions are satisfied, a trade occurs and tradeinformation is then relayed in some fashion to one or more clientdevices so that the traders can have access to the most current marketinformation.

To profit in today's rapidly moving markets, traders must be able toreact more quickly and assimilate enormous amounts of data. For example,before making any trades, a trader may have to quickly assimilate andanalyze many different types of data, such as market data, world news,or business news. Additionally, every week, different departments of theU.S. government, professional organizations, and academic institutionsissue dozens of economic statistics and indicators. Such reports oftenserve as useful tools that allow one to assess the overall strength andthe likely direction of the economy. These indicators can also have asignificant impact on the markets, and can move the markets immensely onany given day. Therefore, many traders watch economic reportannouncements very closely, and many of them try to take advantage ofthe quick market changes that are caused by the announcements of somenumbers, while others try to limit their losses to the possible minimumby attempting to delete any of their pending orders, for example.

Thus, it is desirable for electronic trading applications to offer toolsthat can assist traders in trading in an electronic trading environment,help them in making profitable trades in a speedy and accurate manner,while allowing the traders to effectively monitor and use the economicreports as well as other news announcements to their advantage.

BRIEF DESCRIPTION OF THE DRAWINGS

Example embodiments of the present invention are described herein withreference to the following drawings, in which:

FIG. 1 is an example network configuration for a communication systemutilized to access one or more exchanges;

FIG. 2 is a block diagram illustrating an example client device that canbe used in the example network of FIG. 1;

FIG. 3 is a block diagram illustrating an example news traderapplication according to one example embodiment;

FIG. 4 is a flow chart illustrating a method for processing economicindicators according to one example embodiment;

FIG. 5 is a block diagram illustrating a graphical interface forreceiving user inputs and/or displaying economic indicator valuesaccording to one example embodiment;

FIGS. 6A and 6B are block diagrams illustrating two graphical interfacesthat may be used for displaying estimated, actual, and/or revisedindicator values, and for viewing trading strategies in relation to theconfigured values according to one example embodiment;

FIG. 7 is a block diagram illustrating another graphical interface thatmay be used for displaying a plurality of trading strategies in relationto estimated indicator values before receiving an actual indicator valueaccording to one example embodiment; and

FIG. 8 is a block diagram illustrating a graphical interface that may beused for displaying a plurality of trading strategies in relation toestimated indicator values after the announcement of an actual indicatorvalue according to one example embodiment.

DETAILED DESCRIPTION

I. News Trader Overview

According to the preferred embodiments, a system and method aredescribed herein for event-based trading. In the embodiments describedhereinafter the events will be described in terms of any news-relatedindicators, such as unemployment number values, interest rates values,and others. According to one method, a trader can predefine a tradingstrategy including a number of trading rules to be applied based on acomparison of an estimated news-related indicator value to an actualnews-related indicator value to be announced at some later time. Oncethe trader defines the trading rules, the method further includesreceiving the actual news-related indicator value, and thenresponsively, selecting the appropriate trading rules, and automaticallyexecuting the selected trading rules. In one embodiment, the value ofthe actual indicator value can be received directly from a user who mayinput the value via a graphical interface. Alternatively, the actualindicator value can be received directly from outside news sources.

While the present invention is described herein with reference toillustrative embodiments for particular applications, it should beunderstood that the present invention is not limited thereto. Thosehaving ordinary skill of art will recognize that many additionalmodifications and embodiments are possible as well.

II. Hardware- and Software Overview

FIG. 1 is a block diagram illustrating an example trading system inaccordance with the preferred embodiments. The system includes a hostexchange 100, a gateway 102, and a client device 104. Also, a trader atclient device 104 might receive news from one or more news sources, suchas a news source 120. FIG. 1 illustrates a single client device that isconnected to a single exchange via a gateway; however, it should beunderstood that a plurality of client devices could connect to aplurality of exchanges via a plurality of gateways.

To receive news related data, a trader at the client device 104 maysubscribe to one or more news services to receive news feeds fromproviders such as Bloomberg and Reuters, and/or the trader mightsubscribe to real-time quotation vendors that provide information totraders for decision support. However, it should be understood thattraders could subscribe to other news and information sources, all ofwhich are collectively referred to as news data. Also, it should beunderstood that the client device 104 may receive news data directlyfrom the news sources, or via any intermediate devices, such as thegateway 102, for example.

Although each referenced component in FIG. 1 is described directly belowin their respective sections, it should be understood that thecomponents may take the form of an entirely hardware embodiment, anentirely software embodiment, or an embodiment combining software andhardware aspects. Furthermore, some of the components of FIG. 1 may takethe form of a computer readable medium having a computer readableprogram code means embodied in a storage medium. Any suitable computerreadable medium may be utilized including hard disks, CD-ROMS, opticalstorage devices, or magnetic storage devices. Also, it should beunderstood that the preferred embodiment may be implemented on manyother system configurations.

A. Exchange

According to one example embodiment, host exchange 100 may include anyexchange that matches orders electronically. Some example exchangesinclude the London International Financial Futures and Options Exchange(“LIFFE”), the Chicago Board of Trade (“CBOT”), the Chicago MercantileExchange (“CME”), the Exchange Electronic Trading (“Xetra,” a Germanstock exchange), the European exchange (“Eurex”), Euronext, or Island.Exchange 100 might also refer to other known or later developedfacilities that automatically match incoming orders that are receivedfrom client devices. The example exchanges and other exchanges are wellknown in the art.

Exchange 100 allows traders to trade tradeable objects that exchange 100offers for trading. As used herein, the “tradeable object” refers simplyto anything that can be traded with a quantity and/or price. Itincludes, but is not limited to, all types of tradeable objects such asfinancial products, which can include, for example, stocks, options,bonds, futures, currency, and warrants, as well as funds, derivatives,and collections of the foregoing, and all types of commodities, such asgrains, energy, and metals. The tradeable object may be “real,” such asproducts that are listed by an exchange for trading, or “synthetic,”such as a combination of real products that is created by the user. Atradeable object could actually be a combination of tradeable objects,such as a class of tradeable objects.

According to the preferred embodiments, to keep participating tradersinformed of changes in a market, exchange 100 relays market informationover a transmission channel 108 to client device 104 via gateway 102.Transmission channel 108 can include any connection types being used byexchange 100, such as a Ti line, for example, and the transmissionchannel can carry information in either analog or digital format. Itshould be understood that exchange 100 could use a number of differentcommunication protocols for connecting and sending market information toclient devices. For example, exchange 100 can connect to client device104 via gateway 102 using TCP/IP, and can provide market informationusing the Financial Information Exchange (“FIX”) protocol, which is amessaging standard developed specifically for real-time electronicexchange type transactions. FIX is a public-domain specification ownedand maintained by FIX Protocol, Ltd.

Market information that exchange 100 sends to client device 104 viagateway 102 may include data that represents just the inside market,where the inside market is the lowest sell price (best offer) in themarket, and the highest buy price (best bid) in the market at aparticular point in time. Market information may also include marketdepth, where market depth refers to quantities available at the insidemarket and can also refer to quantities available at other prices awayfrom the inside market. It should be understood that market informationcan also contain other types of market information such as the lasttraded price (“LTP”), or the last traded quantity (“LTQ”). Additionally,the market information that is sent to a single trader may include orderand/or fill information related to orders associated with that trader.

Once a trader submits an order to an exchange, the exchange may processthe order using different execution algorithms, and the type of thealgorithm used may depend on the tradeable object being traded. Someexample order execution algorithms include first-in-first-out (“FIFO”)and pro-rata algorithms. The FIFO algorithm, used for some tradeableobjects listed with Eurex, for example, gives priority to the firstperson in an order queue at an exchange to place an order. The pro rataalgorithm, used for some tradeable objects listed with LIFFE, forexample, splits orders for the same price, and the orders at identicalprices are filled in proportion to their size. Also, it should beunderstood that the price order queue is a term that covers a broadrange of systems used by an exchange to conduct orderly financialtransactions such as, for example, a FIFO based system or a pro ratasystem. Also, the present invention is not limited to any particulartype of order execution algorithm, and different algorithms could alsobe used.

B. Gateway

According to the preferred embodiment, gateway 102 can be a computerrunning software that receives market information and order informationfrom host exchange 100. As used herein, a computer includes any devicewith memory 110 and a processor 112 capable of processing information toproduce a desired result. Thus, gateway 102 can be a computer of anysize such as a server, workstation, personal computer, or laptop, but,generally, gateway 102 can be any computer device that has theprocessing capability to perform the function described herein. Also, itshould be understood that the functions of gateway 102 could be moved tohost exchange 100 and/or client device 104 to reduce or eliminate theneed for gateway 102.

In the preferred embodiment, gateway 102 receives market information aswell as order related data from host exchange 100, and forwards thereceived data to client device 104. In one embodiment, while marketinformation may be transmitted between exchange 100 and client device104 using multicast transmission, order related information, such asorder fills, order requests, or order modification requests aretypically sent using unicast transmission. As known in the art, whilethe multicast allows for communication between a single sender andmultiple receivers in the network, the unicast only allows forcommunication between a single sender and a single receiver. It shouldbe understood that while there are many possible protocols that can beused to multicast and unicast information between exchange 100 andclient device 104 via gateway 102, the Pragmatic General Multicast(“PGM”) protocol could be used for multicasting, and the Point to PointProtocol (“PPP”) could be used for unicasting, for example.

Also, as known by those skilled in the art, gateway 102 may have one ormore servers to support data feeds that are received from exchange 100.In one embodiment, gateway 102 may include a price server 114 forprocessing price information, an order server 116 for processing orderinformation, and a fill server 118 for processing fill information.Generally, a server is software that responds to commands from clientdevice 104 in form of subscription. That is, a trader at client device114 can subscribe to price information, order information, and fillinformation for a particular tradeable object being offered at hostexchange 100. In one embodiment, the subscription may be established viaa process of sending a number of messages between client device 104 andgateway 102. For example, gateway 102 may first authenticate a trader atclient device 104, and then client device 104 may establish separatecommunication links, such as IP links, to each server at gateway 102. Inthe embodiment illustrated in FIG. 1, client device 104 would establishthree separate IP connections to three servers at gateway 102.

Price server 114, order server 116, and fill server 118 receiveinformation from exchange 100. According to a preferred embodiment,price server 114 may receive and process price information related toone or more tradeable objects being offered at exchange 100, while orderserver 116 may receive and process order related information. In oneembodiment, exchange 100 may be connected to gateway 102 using twocommunication links, a first link between exchange 100 and price server114, and a second link between exchange 100 and order server 116. Insuch an embodiment, a separate connection may exist between order server116 and fill server 118 such that, when the order information that isreceived at order server 116 includes any fill related information,order server 116 may pass the fill data to fill server 118, which maythen process and send the fill data to client device 104. It should beunderstood that the gateway configuration described above is only oneexample, and different implementations are possible as well.

C. Client Device

Client device 104 can be a computer, such as a workstation, desktop,laptop, handheld device, and so forth, that allow a trader to trade oneor more tradeable objects that are offered at exchange 100. Clientdevice 104 may include at least processor and memory. The processor andmemory, which are both well-known computer components, are not shown inthe Figure for sake of clarity. Preferably, the processor has enoughprocessing power to handle and process various types of marketinformation. The more market information is received and processed, themore processing power is preferred. However, any present day processorhas enough capability to perform at least the most basic part of thepresent invention.

Memory may include a computer readable medium. The term computerreadable medium, as used herein, refers to any medium that participatesin providing instructions to a processor unit for execution. Such amedium may take many forms, including but not limited to, non-volatilemedia, and transmission media. Non-volatile media include, for example,optical or magnetic disks, such as storage devices. Volatile mediainclude, for example, dynamic memory, such as main memory or randomaccess memory (“RAM”). Common forms of computer readable media include,for example, floppy disks, flexible disks, hard disks, magnetic tape,punch cards, CD-ROM, or any other physical medium with patterns ofholes, a RAM, a PROM, an EPROM, a FLASH-EPROM, and any other memory chipor cartridge, or any other medium from which a computer can read.

Client device 104 can communicate with gateway 102 via differentnetworks, such as Local Area Network (“LAN”), a Wide Area Network(“WAN”), or a wireless network via a Virtual Private Network (“VPN”),for example, or a combination thereof. Also, gateway 102 and clientdevice 104 can communicate order and market related information usingany messaging protocols, such as any proprietary messaging protocols.However, it should be understood that different networks and differentmessaging protocols could also be used.

When client device 104 receives market information and order relatedinformation from exchange 100, the received information may be displayedto the trader(s) on the visual output device or display device of clientdevice 104. However, it should be understood that the information couldbe provided to a trader using other means such as sound. The outputdevice can be any display device. For example, the display could be aCRT-based video display, an LCD-based or a gas plasma-based flat-paneldisplay, a display that shows three-dimensional images, or some othertype of display.

Upon viewing the market information or a portion thereof, a trader maywish to send orders to an exchange, cancel orders, change orders, queryan exchange, and so on. To do so, the trader may input various commandsor signals into client device 104 such as by typing into a keyboard,inputting commands through a mouse, or inputting commands or signalsthrough some other input device. For instance, a trader may click amouse button to initiate an order to buy a particular quantity of thetradeable object at a particular price. Then, client device 104preferably generates transaction information. There are many differenttypes of messages and/or order types that can be submitted, all of whichmay be considered various types of transaction information. Oncegenerated, transaction information is sent from client device 104 tohost exchange 100 over communication links.

In the preferred embodiment, client device 104 uses software to createspecialized interactive trading screens on terminals associated withthem. Trading screens preferably enable traders to, among other things,enter and execute orders, obtain market quotes, and monitor positions.The range and quality of features available to the trader on his or hertrading screen may vary according to the specific software applicationbeing run. In addition to or in place of the interactive tradingscreens, client device 104 could run automated types of tradingapplications.

The preferred embodiment may be implemented on any type of tradingscreen, therefore, details regarding the trading screen are notnecessary to understand the present invention. However, in oneembodiment, one type of trading screen that can be used is provided by acommercially available trading application referred to as X_TRADER® fromTrading Technologies International, Inc. of Chicago, Ill. X_TRADER® alsoprovides an electronic trading interface, referred to as MD Trader™, inwhich working orders and/or bid and ask quantities are displayed inassociation with a static price axis or scale. Portions of the X TRADER®and the MD Trader™-style display are described in U.S. Pat. No.6,772,132, entitled “Click Based Trading With Intuitive Grid Display ofMarket Depth,” U.S. Pat. No. 7,127,424, entitled “Click Based TradingWith Intuitive Grid Display of Market Depth and Price Consolidation,”U.S. Pat. No. 7,389,268, entitled “Trading Tools For ElectronicTrading,” and U.S. Pat. No. 7,228,289, entitled “A System and Method forTrading and Displaying Market Information in an Electronic TradingEnvironment,” the contents of each are incorporated herein by reference.However, it should be understood that orders in the system illustratedin FIG. 1 could also be placed using any other trading application aswell. Additionally, the preferred embodiments are not limited to anyparticular product that performs translation, storage, and displayfunction.

FIG. 2 is a block diagram illustrating an example client device 200,which may be similar to the type of client device 104 shown in FIG. 1.The client device 200 can be any particular type of computing device,examples of which were enumerated above with respect to the clientdevice. According to the preferred embodiments, the client device 200has a trading application 202 and news trader application 204, both ofwhich could be stored in a memory unit. For example, the tradingapplication 202, when executed, may arrange and display marketinformation in many particular ways, depending on how the trader prefersto view the information.

The news trader application 204 can implement the embodiments forautomatic trading based on any trader-defined news related events. Itshould be understood that the news related events can be based on anyeconomic, business, or any other types of news related events that atrader may consider relevant to his/her one or more trading strategies.

Preferably, the trading application 202 and the news trader application204 have access to market information through an application programminginterface (“API”) 206, and the trading application 202 could alsoforward transaction information to the host exchange 212 via the API206. Additionally, the trading application 202 and the news traderapplication 204 could receive economic indicator data or other newsrelated data through the API 206 from outside sources, such as the newssources 218.

Additionally, the trading application 202 and the news traderapplication 204 could receive signals from an input device 216 via aninput device interface 210, and can be given the ability to send signalsto a display device 214 via a display device interface 208.

III. Event Based Trading

Every week and every month, different departments of the U.S.government, professional organizations, and academic institutions issuea large number of economic statistics including economic performanceindicators, as well as other reports. Economic performance indicatorsare often drawn from annual or quarterly accounts and therefore providea useful tool in assessing national economy, such as its strength orweakness. Other indicators may be prepared based on specializedstatistics such as monetary and governmental budget statistics.Regardless of the source of the economic indicators, many of them havethe ability to move markets. Some indicators or indexes, such asemployment indicators or a consumer feelings index on current and futurespending plans, are often referred to as top tier indicators/indexes,since they are closely watched by the majority of traders. Otherindicators, such as reports on wholesale sales, may not get that muchattention from the majority of traders, and thus may have no impact onthe markets. The embodiments described hereinafter will refer to usingeconomic indicators as triggers for trading strategies. However, itshould be understood that the preferred embodiments are not limited toany specific economic indicators or indexes, and may use other newsrelated data such as releases from any governmental agencies, includingreleased of governmental hearing decisions, national elections, or anyother events or any combination of events/indicators that a trader maydeem likely to influence the market movement or the trader's tradingstrategies.

The announcements of economic and other news related indicators arepretty much standardized such that, for example, traders know on whatday and at what time certain indicators or reports will be announced.Also, it is well known that announcements of many indicators may ofteninvolve a number of stages, including an initial announcement of anestimated indicator value, then an announcement of an actual indicatorvalue, and finally an announcement of a revised indicator value. Itshould be understood that while actual and revised indicator values maybe released from actual sources responsible for releasing an indicatorvalue, the estimated indicator values may originate from otherindependent sources, such as one or more economists predicting a certainindicator value. For example, if an indicator is typically announced onJune 1 at 8 a.m., a high, low, and mid estimated value for the indicatormay be initially announced on May 1 at 8 a.m., and then can be furthermodified until June 1. Then, on June 1 at 8 a.m., the actual value forthe indicator will be announced. It should be understood that the actualindicator value could be later revised by announcing a revised indicatorvalue to correct some miscalculations of the actual indicator value. Inthis example, the revised indicator value could be revised some time inAugust.

Since news announcements can move markets and can significantly affecttraders' portfolios, most traders watch them very closely and developtheir trading strategies accordingly. Some traders simply refuse to riskany money and attempt to delete their orders before and/or afterannouncements of certain news or reports that have historically provento trigger unpredictable market movements. Other traders, however, mayview some news releases as a great opportunity to implement theirtrading strategies, and therefore often attempt to take advantage of thesudden market movements that are caused by announcements of certainindicators. According to the example embodiments that will be describedin greater detail below, a trader may automate the process of reactingto news releases by pre-defining one or more trading strategies to beautomatically executed upon detecting any user-defined news releases.

Typically, a trader tracks a host of indicators and develops his tradingstrategies using the numbers he sees. Many trading strategies are oftenbased on a comparison of the actual indicator values at the time oftheir announcement to one or more earlier estimated indicator values.Therefore, the trader's financial success in taking advantage of themarket movements may depend on the trader's ability to quickly see therelative difference between the estimated indicator values compared tothe actual indicator values at the time of their announcement, and onthe trader's ability to quickly and accurately implement trader'strading strategies upon the release of the actual indicator values. Theexample embodiments that will be described hereinafter enable a traderto easily configure and modify trading strategies in relation to one ormore indicator values, and quickly view a relative position of any newlyreleased number compared to a group of estimated numbers, for example.

According to the example embodiments, a trader may define a plurality oftrading strategies that can be automatically executed upon detecting oneor more predefined indicator-related triggers. In one embodiment, thetrader may do that using one or more graphical user interfaces (“GUI”).For example, before one or more actual values associated with theselected indicators are announced, a trader could configure a set oftrading rules based on one or more estimated indicator values. In suchan embodiment, when one or more actual numbers corresponding to theselected indicators are announced and received at the news traderapplication 204, the news trader application 204 could automaticallyexecute one or more trading strategies selected based on the comparisonof the actual indicator values to the respective estimated indicatorvalues.

FIG. 3 is a block diagram illustrating a news trader application 300 forcarrying out the present embodiments. The news trader application 300includes an indicator/trading strategy receiving component 302, anindicator processing component 304, and an action taking component 306.The components 302, 304, and 306 may include software and/or hardwareelements to perform their functions. However, it should be understoodthat the news trader application 300 may include more or fewercomponents than those shown in FIG. 3. Also, the illustrated componentscould be combined with other components. For example, the news traderapplication 300 could be combined with the trading applicationcomponents of a particular client device.

The receiving component 302 may receive trading strategy requests fromtraders via a user input interface 310. According to one exampleembodiment, a trader may input a number of trading rules to be used fora specific trading strategy. A trading rule may include one or moreconditions and one or more actions to be taken when the conditions aresatisfied or not satisfied (depending on user configuration). Accordingto one example embodiment, a trading rule condition may take a format ofany user-configurable expression or equation including one or morevariables relating to economic indicators or other news related data.For example, the trading rule condition may be based on a differencebetween an estimated indicator value and an actual indicator value atthe time when the actual indicator value is announced.

In addition to defining at least one condition for a trading rule, atrader can also define one or more actions to be taken once thecondition is satisfied. According to an example embodiment, a trader maydefine many different market related actions to be taken once one ormore conditions associated with a trading rule are satisfied. Forexample, an action may include any market related request, such as arequest to send one or more buy or sell orders for predefined tradeableobjects to one or more user-specified exchanges, adjusting orderparameters, deleting one or more orders, or a combination thereof Itshould be understood that when a trader defines a request to submit anorder to an exchange, a trader may define a tradeable object for whichthe order should be placed, one or more exchanges to which the ordershould be sent, an order quantity, an order price, an order type, a timewhen the order should be sent or cancelled, or any other order relatedparameters.

Also, it should be understood that some economic indicators can includea number of indicator components. In such an embodiment, a graphicalinterface could be provided to enable a trader to select which indicatorcomponents the trader wishes to use as conditions for his tradingstrategy, and which indicator components the trader wishes to eliminate.Also, a trader could assign different weights to the indicatorcomponents such that some components would be given a higher weight thanothers. Alternatively, different weights could be assigned to differentactual indicator values. In such an embodiment, for example, uponreceiving data related to one or more components associated with tradingrules, the news trading application could initially determine a weightassigned to each component based on the received indicator values, andthen may sum the weights to determine a composite weight value. Then,the news trading application could select a trading strategy based onthe composite weight value. It should be understood that the same methodfor determining a trading strategy based on adding weight values is notlimited to indicator components, and the same method could also beapplied to the main indicators corresponding to a trading strategy.

In addition to receiving trading strategies, the receiving component 302could also receive economic indicator and other news related data. Inone embodiment, such data may be received directly from outside sources308. Alternatively, a trader could monitor a set of indicators and inputindicator values via the user input interface 310, the embodiments ofwhich will be described in greater detail below.

When a trader sets up a number of trading rules to be applied inresponse to detecting one or more indicator types and indicator values,the indicator processing component 304 may start monitoring dataassociated with the indicators specified in relation to the definedtrading rules. Then, when the indicator processing component 304 detectsthat the conditions associated with a specific trading strategy aresatisfied, the action taking component 306 may take certain actionsspecified for the detected conditions. For example, the action takingcomponent 306 may send a request to the trading application 312 toautomatically submit one or more orders on the trader's behalf. Also,when the news trader application 300 receives any actual values, orrevised values associated with one or more indicators, the action takingcomponent 306 may display the received data via an output interface 314.

FIG. 4 is a flow chart illustrating an example method 400 for automatictrading based on events, such as economic or news related indicatorvalues according to one example embodiment. The method 400 will bedescribed in relation to the components illustrated in FIG. 3; however,it should be understood that different components could also be used toexecute the method. Also, it should be understood that the flow chartonly shows the functionality and operation of a possible implementationof the present embodiments. In this regard, each block may represent amodule, a segment, or a portion of the code, which includes one or moreexecutable instructions for implementing specific logical functions orsteps in the process. Alternative implementations are included withinthe scope of the preferred embodiments of the present invention in whichfunctions may be executed out of order from that shown or discussed,including substantially concurrent or in reverse order, depending on thefunctionality involved, as would be understood by those reasonablyskilled in the art of the present invention. The method 400 is describedin relation to economic indicators. However, as mentioned earlier, themethod 400 can be applied in relation to any event values, including anynews related events such as economic indicators.

At step 402, the receive component 302 receives an estimated valueassociated with an economic indicator. In one embodiment, a trader mayinput the estimated value associated with the indicator using the userinput interface 310. Alternatively, the estimated value may be receivedfrom any outside source selected by the trader. It should be understoodthat the method 400 is not limited to using a single indicator, and morethan one indicator could also be used.

At step 404, the action taking component 306 may initiate the process ofdisplaying the estimated value associated with the economic indicator ona graphical interface at a client device. Then, at step 406, the tradermay define at least one trading strategy based on one or moreindicators. As mentioned earlier, the trader may define a number oftrading rules to be automatically executed upon detecting anannouncement of an actual value for each indicator specified in relationto the trading strategy. Each trading rule, as described above, may beassociated with at least one condition, and the condition may be basedon a comparison of an actual value to be received for a specificindicator compared to the estimated value specified for that indicator.However, it should be understood that similar rules could be definedbased on a comparison of a revised indicator value and an actualindicator value. Also, as mentioned earlier, trading rules could bedefined based on trader's predictions or some other news releases.

At step 408, the indicator receive component 302 receives the actualvalue associated with the economic indicator. At step 410, the indicatorprocessing component 304 selects one of the trading strategies based ona comparison of the actual indicator value to the estimated indicatorvalue. It should be understood that when a trading strategy includes aplurality of conditions associated with different indicators or newsrelated data, the action taking component 306 may trigger the executionof the trading strategy once all conditions are satisfied.

FIG. 5 is a block diagram illustrating one example news trader interface500 that a trader may use to input actual event values.

The news trader interface 500 includes two window interfaces 502 and 504that display in a wrapping vertical bar one or more values for aselected indicator, such as an unemployment number, for example. Itshould be understood that the graphical interface in FIG. 5 illustratesonly one example embodiment, and different displays or layouts couldalso be used. For example, the interfaces could display one or morehorizontal bars with values wrapping around in any user-defineddirection. According to the embodiment illustrated in FIG. 5, a tradermay define three estimated event values, referred hereinafter asestimated indicator values, such as estimated high, low, and averagevalues for an indicator via a set up window (not shown), which may beactivated by selecting a setup icon 520. Additionally, the trader coulduse the set up window to enter a time and day for the occurrence of theactual indicator (such as 11 CST, every first Friday of the month). Whenthe trader closes the set up window, the window interface 502 candisplay the estimated values for the indicator. More specifically, asshown in FIG. 5, the display window 502 displays three estimatedindicator values, including an average indicator value of −0.4 at 508, ahigh estimated indicator value of 0.8 at 506, and a low estimatedindicator value of −1.4 at 510. The interface 500 also displays a time,such as 9:00 CST at 518, when the actual number will be announced. Inaddition to displaying the time when the number is to be announced, thewindow interface 500 could also display a clock 516 specifying the timeleft until the number announcement. Alternatively, the clock 516 coulddefine time since the number has been announced. In such an embodiment,the window displaying the time may be color coded to distinguish betweenthe time left until the indicator release, and the time passed since theindicator release. For example, red could be used to define time leftuntil the indicator release, and blue could be used to define timepassed since the indicator release.

In one embodiment, when the actual number associated with the indicatoris announced, the trader may input the value associated with theannounced indicator via the window interface 502 by simply selecting thevalue corresponding to the number. When the trader selects the actualindicator value, it may be displayed via the window interface 502. Itshould be understood that the values associated with differentcategories of indicators, such as estimated and actual indicator values,could be color-coded such that a trader can easily distinguish betweenthe two categories. For example, once the actual value associated withthe indicator is input by a trader, the window interface 502 may displaythe actual value, such as 1.1 at 512, in relation to the estimatedindicator values.

Also, a number of news trading applications being used by a plurality oftraders can be networked together to allow communication of indicatordata between the traders. In such an embodiment, when one of thenetworked traders inputs an actual value corresponding to an indicatorbeing monitored or used by one or more other traders in the group, thenews trader application corresponding to the trader who input the datamay automatically send the received actual indicator value to all othertraders in the group using that indicator as part of their tradingstrategy, for example. It should be understood that the ability to inputand automatically distribute indicator data may be limited to systemadministrators, for example.

Using the window interface 504, a trader could also enter a revisedvalue for the last month's actual indicator value. In such anembodiment, while the window interface 502 can display estimated andactual values for an unemployment number for the month of October, forexample, the revised value entered via the window interface 504 willcorrespond to the revised value of the actual unemployment number forthe month of September, such as 0.9 shown at 514. The window interface504 could also display the last month's actual indicator value such as1.0 at 522. It should be understood that when the trader enters theactual value for an indicator associated with a predefined tradingstrategy, the user input may dynamically trigger the execution of thetrading strategy that is based on that actual indicator value. Also, itshould be understood that while the embodiments described in relation tothe graphical interface 500 refer to a trader entering estimated,actual, and revised indicator values, alternatively, these numbers maybe directly received in one or more predefined formats from outsidesources selected by the trader. In such an embodiment, when the newstrading application receives indicator data from outside sources, thenews trading application may automatically display the receivedindicators via the window interfaces, and may dynamically execute anytrading strategies that are triggered based on the received indicatorvalues.

FIGS. 6A and 6B are block diagrams 600 illustrating two graphicalinterfaces that may be used for displaying estimated, actual, and/orrevised indicator values, and for viewing trading strategies in relationto the configured numbers. FIGS. 6A and 6B refer to indicator values,however, the interfaces could also be used in relation to any eventvalues.

More specifically, FIG. 6A is a block diagram illustrating a graphicalinterface 602 for displaying estimated indicator values and tradingstrategies in relation to an axis of values. The graphical interface 602illustrates three icons associated with estimated indicator valuesincluding a low estimated indicator value of −1.4, an average estimatedindicator value of −0.4, and a high estimated indicator value of 0.8. Inone embodiment, the interface 602 could initially display one or moreicons that a trader could simply position at locations corresponding todesired estimated indicator values. In such an embodiment, a tradercould easily and quickly modify estimated indicator values by simplydragging the icons to desired locations on the interface 602. Inaddition to displaying the estimated indicator values, the interface 602displays a number of trading rules icons corresponding to trading rulesto be automatically executed upon detecting an actual indicator valuebeing in one of the predefined ranges. It should be understood thattrading rule icons could also be moved in relation to the axis such thata range of estimated indicator values corresponding to the rule ismodified based on repositioning of the indicators. For example, as shownin FIG. 6A, if an actual indicator value is between endpoints 0.8 and1.2, the action taking component 306 of the news trading application 300may automatically submit an order to Buy 10 contracts corresponding tothe tradeable object ESDec 03. Similarly, for example, if an actualindicator value is between endpoints −0.9 and −1.4, the action takingcomponent 306 may automatically submit an order to Sell 5 contractscorresponding to the tradeable object NQ Dec03. It should be understoodthat a trader can specify whether a trading strategy includes endpoints.

Also, the trading rules illustrated in FIG. 6A are only example rules,and more complicated trading strategies could be defined as well. In oneembodiment, the trading strategies may be input by a trader using agraphical interface that the trader could activate by simply clicking onany location within the interface 602. Also, it should be understoodthat a trader could define a specific time when the action takingcomponent 306 should execute the trading rules. In one embodiment, thenews trader application 300 could execute a trading rule when allconditions triggering the trading rule are-satisfied. Alternatively, atrader could define a specific time after a trading rule is triggeredwhen the news trader application should execute the trading rule. Thoseskilled in the art will understand that many different ruleconfigurations are possible as well.

FIG. 6B is a block diagram 604 illustrating the graphical interface ofFIG. 6A once the actual indicator value is received at the receivecomponent 302 of the news trader application 300. More specifically, theinterface 604 illustrates an actual indicator value of 1.1 in relationto the estimated indicator values of 0.8, −−0.4, and −1.4. The interface604 also indicates a trading rule that was applied or will be applied inrelation to one or more tradeable objects based on the actual indicatorvalue compared to one or more estimated indicator values. In analternative embodiment, the interfaces 602 and 604 could be color-codedto enable a trader to quickly assess a possible impact of the receivednumber on the market. For example, if an actual unemployment value fallsclose to the high estimated value, a portion or the entire interfacecould change color to represent either a possible positive or negativeimpact on the market.

FIGS. 6A and 6B illustrate only one example graphical representation fordisplaying indicator values as well as trading rules. It should beunderstood that the interfaces could take any user-configurable formatsand could be positioned horizontally, vertically (as shown), or at anyother user-defined angles. Also, a trader could configure indicatortypes and indicator colors to be used to represent different indicatortypes, and a single interface could be used to display indicator valuesas well as trading strategies corresponding to different indicators.Additionally, while the interface 602 displays trading strategiescorresponding to single tradeable objects, in an alternative embodiment,the interfaces could display a sum of all buys and sells correspondingto more than one tradeable object that is associated with a specifictrading strategy. In such an embodiment, a trader could view whichtradeable objects that are associated with the sum by simply clicking onthe displayed numbers, for example.

FIG. 7 is a block diagram illustrating another embodiment of a graphicaluser interface 700 that may be used by a trader to input and viewtrading rules in relation to estimated indicator values for a selectedindicator according to one example embodiment. The interface 700displays a countdown clock 702 corresponding to a time interval, such as1 minute and 23 seconds, in this embodiment, before the next release ofthe actual indicator value. The interface 700 also displays at 704 anumber of values, some of which may correspond to the estimatedindicator values that are used to define conditions triggering differenttrading rules. More specifically, as illustrated at 706, three valuesare selected to represent an estimated indicator range including a high(“H”) estimated indicator value of 1.75, an average estimated (“E”)indicator value of 1.25, and low (“L”) estimated indicator value of0.25. It should be understood that the values displayed at 704 may beinput by a trader or may be received from any other sources. In additionto the estimated indicator value, the interface 700 also displays at712, the previous indicator values, such as the actual indicator valuecorresponding to the previous indicator release.

The interface 700 also displays a number of trading rules for thetradeable objects ESDec03 at 708 and NQDec03 at 710. The activation ofthe trading rules, as shown in FIG. 7, may depend on detecting one ormore conditions associated with estimated indicator values specified forthe trading rules. For example, upon detecting that an actual indicatorvalue is at 1.75, the news trader application can submit an order tosell 50 lots for the tradeable object ESDec03, and an order to sell 25lots for the tradeable object NQ Dec03. Similarly, if the actualindicator value turns out to be 1.25, no action will be taken inrelation to the ESDec03 tradeable object, and the news traderapplication can delete all orders (“D.A”), as shown in FIG. 7,associated with the tradeable object NQ Dec03. It should be understoodthat a trader could set up trading rules using another interface thatthe trader could activate by simply selecting a cell corresponding toone or more estimated indicator values. Alternatively, another interfacecould be provided to allow a trader to select and drag into theinterface 700 tradeable objects in relation to which the trader coulddefine a number of trading strategies. Also, it should be understoodthat while each cell corresponding to a specific indicator value leveldisplays only a total quantity and an action to be taken at that level,a trader could simply select the cell to view or modify any parametersrelated to the trading rule.

In one embodiment, a trader could preconfigure a large number of tradingstrategies for many tradeable objects. However, rather than applying allpreset strategies whenever conditions for the strategies are satisfied,a trader could activate or deactivate which strategies should be used bysimply selecting activation boxes 714 displayed in relation to eachtradeable object. Also, it should be understood that rather than usingactual indicator values, a trader could also select revised indicatorvalues as conditions for the trading strategies. To do that, the tradercould simply select one of the boxes 716 corresponding to the actual orrevised indicator values.

FIG. 8 is a block diagram illustrating one embodiment of a graphicalinterface 800 that may be displayed to a trader after the actualindicator value is received at the news trader application.

A countdown clock 802 now indicates the time of 7 seconds since therelease of the actual indicator value. Also, the interface 800 displaysthe actual (“A”) indicator value of 0.1 in relation to the average,high, and low estimated indicator values at 806. In one embodiment, oncethe actual indicator value is detected, the interface 800 can highlighta trading strategy selected based on the actual indicator value. In theembodiment illustrated in FIG. 8, the trading rules to sell 25 lots ofthe tradeable object EDec03, as shown at 808, and to buy 15 lots of thetradeable object NQ Dec03, as shown at 810, correspond to the actualindicator value of 0.1. It should be understood that the interface 800could also use different colors or different indicators to distinguishbetween different stages of execution of the trading strategy. Forexample, one color or an indicator could be selected to represent anaction of sending one or more orders to an exchange, and differentcolors or indicators could be used to represent different stages ofexecuting the trading strategy, such as detecting fills for thesubmitted orders. Also, the interface 800 may illustrate previous andrevised indicator values corresponding to the last announcement periods,such as the last week, month, or quarter, for example.

The above description of the preferred embodiments, alternativeembodiments, and specific examples, are given by way of illustration andshould not be viewed as limiting. Further, many changes andmodifications within the scope of the present embodiments may be madewithout departing from the spirit thereof, and the present inventionincludes such changes and modifications.

It will be apparent to those of ordinary skill in the art that methodsinvolved in the system and method for event driven virtual workspace inan electronic trading environment may be embodied in a computer programproduct that includes one or more computer readable media. For example,a computer readable medium can include a readable memory device, such asa hard drive device, CD-ROM, a DVD-ROM, or a computer diskette, havingcomputer readable program code segments stored thereon. The computerreadable medium can also include a communications or transmissionmedium, such as, a bus or a communication link, either optical, wired orwireless having program code segments carried thereon as digital oranalog data signals.

The claims should not be read as limited to the described order orelements unless stated to that effect. Therefore, all embodiments thatcome within the scope and spirit of the following claims and equivalentsthereto are claimed as the invention.

1. A system for event-based trading, the system comprising: a computingdevice configured to receive a news data feed originating from a sourceother than an electronic exchange, wherein the news data feed providesan actual event value for a news event that affects a market related toa tradeable object, wherein the computing device is further configuredto receive an estimated event value for the news event prior to anannouncement of the actual event value, wherein the computing device isfurther configured to define a first trading strategy comprising a firstplurality of trading rules to be executed based on a comparison of theestimated event value to the actual event value, wherein the computingdevice is further configured to receive the actual event valuesubsequent to receiving the estimated event value and defining the firsttrading strategy, wherein the computing device is further configured toselect a trading rule of the first plurality of trading rulescorresponding to the first trading strategy based on a comparison of theactual event value to the estimated event value, and wherein thecomputing device is further configured to execute the selected tradingrule, wherein to execute the selected trading rule, the computing deviceis further configured to generate a transaction message to be sent tothe electronic exchange.
 2. The system of claim 1, wherein the estimatedevent value comprises an estimated news-related event indicator value,and wherein the actual event comprises an actual news-related indicatorvalue.
 3. The system of claim 1, wherein the actual event value and theestimated event value are received directly from a news source throughthe news data feed.
 4. The system of claim 3, wherein computing deviceis further configured to display the estimated event value in a firstgraphical format on a graphical user interface.
 5. The system of claim4, wherein the computing device is further configured to display theactual event value in a second graphical format on the graphical userinterface in response to receiving the actual event value.
 6. The systemof claim 5, wherein the estimated event value and the actual event valueare displayed using different indicators.
 7. The system of claim 5,wherein the computing device is further configured to display a timeleft before the actual event value is released.
 8. The system of claim5, wherein the computing device is further configured to display a timesince a release in response to receiving the actual event value.
 9. Thesystem of claim 1, wherein the actual event value and the estimatedevent value are input by a user via a graphical user interface.
 10. Thesystem of claim 1, wherein the computing device is further configured todisplay the first plurality of trading rules in relation to theestimated and actual event values displayed via a graphical userinterface.
 11. The system of claim 1, wherein the computing device isfurther configured to define a second trading strategy comprising asecond plurality of trading rules to be applied based on a comparison ofthe actual event value to a revised event value to be announced at alater time, wherein the computing device is further configured toreceive the revised event value, wherein the computing device is furtherconfigured select a trading rule of the second plurality of tradingrules based on a comparison of the revised event value to the actualevent value, and wherein the computing device is further configured toexecute the selected trading rule of the second plurality of tradingrules corresponding to the second trading strategy.
 12. The system ofclaim 10, wherein the computing device is further configured to displaythe revised event value and the actual event value on a graphical userinterface.
 13. The system of claim 11, wherein the revised event valuecomprises a revised news-related indicator value.
 14. The system ofclaim 1, wherein the transaction message comprises an order transactionmessage.
 15. The system of claim 14, wherein the order transactionmessage comprises an order message to buy or sell the tradeable object.16. The system of claim 14, wherein the order transaction messagecomprises an order cancel request message.
 17. The system of claim 14,wherein the order transaction message comprises an order change requestmessage.